Types of Remedies

1. Legal Remedies

• Available against a person who breaches the contract "as of right".

• Can be in the form of:

  • Damages (financial compensation)

  • Remedies against the goods (e.g., right to reject)

• Includes the right to repudiate the contract.

2. Equitable Remedies

• These remedies are discretionary. Including;

  • Specific performance: An order from a court requiring one party to perform their contractual obligations.

  • Rescission: Allows a contractual party to cancel the contract, essentially unwinding the transaction to revert to the pre-contractual position.

3. Remedies under Specific Statutes

• Certain Acts provide specific remedies, such as:

  • Law Reform (Frustrated Contracts) Act 1943

  • Consumer Rights Act 2015

Compensatory Damages (Actual Damages)

• Aims to cover the losses suffered by the innocent party and restore them to the position as if the breach had not occurred.

Assessment for Entitlement to Damages

Consider four factors:

1. Has the claimant suffered any loss?

2. Did the breach of contract cause the loss?

3. Was the type of loss reasonable foreseeable?

4. Did the claimant mitigate the loss?

Recovery of Damages

• Compensatory damages can be claimed:

  • If actual loss occurred.

  • Even if no real loss occurred (nominal damages).

Causation

• Causation: Causation refers to the need to establish that the breach of contract is what caused the damages suffered by the claimant. This often involves the "but for" test, which asks whether the claimant would have suffered the loss "but for" the defendant's breach of contract.

• Stansbie v Troman (1948):

  • Facts: A decorator left premises unlocked, leading to burglary.

  • Held: Liable because he had a contractual obligation to secure the premises. (This is known as the "but for" test).

Remoteness

This principle dictates that the damages recoverable must not only be causally linked to the breach but also must be foreseeable to both parties at the time the contract was made.

• Hadley v Baxendale:

  Facts: Delay in delivering a crankshaft caused lost profits for a mill.

  Held: Unsuccessful claim due to the defendant's lack of knowledge about the mill's operating necessity.

• Victoria Laundry v Newman Industries:

  • Facts: Boiler delivery was delayed, affecting usual profits; a special contract loss was claimed but failed.

  • Held: Claimant recovered usual profit losses as they were a natural consequence.

• Czarnikow Ltd v Koufos:

  • Facts: Late delivery of sugar led to losing profits from a market price fall.

  • Held: The claim was valid as the ship owners knew of the fluctuating market price.

Nominal & Substantial Damages

• Nominal damages: Minimal damages awarded for a term broken without real loss.

  • Case: Stainforth v Lyall - boat loading breach resulted in nominal damages.

• Substantial damages: Awarded despite a lack of real loss based on fairness (Wrotham Park Award).

  • Case: Wrotham Park Estate Co v Parkside Homes Ltd - awarded damages as an alternative to injunction for building breach.

Types of Losses

1. Expectation Loss:

   • Typical measure for breach compensation (loss of bargain).

   • Case: Bence Graphics International Ltd v Fasson UK Ltd - awarded damages for replacing faulty decals.

2. Reliance Loss:

   • Expenses incurred by reliance on contract performance.

   • Case: Anglia TV v Robert Reed - damages for incurred expenses due to actor's breach.

3. Speculative Loss:

   • Future potential losses, hard to quantify but may be compensated.

   • Case: Chaplin v Hicks - awarded damages for loss of audition opportunity.

4. Loss of Amenity:

   • Damages for inability to enjoy life aspects (e.g., inconvenience).

   • Case: Farley v Skinner - awarded damages for distress caused by aircraft noise.

5. Non-Pecuniary Loss:

   • Refers to damages that cannot be easily quantified in monetary terms, including emotional distress, pain and suffering, or loss of enjoyment of life.

   • These losses are compensated to recognise the intangible harm suffered by an individual as a result of a breach of contract or tort.

   • Case: Addis v Gramophone Co Ltd - damages must reflect actual losses as specified in the contract, limiting claims for future loss of earnings.

Assessing Damages

• Injured party must mitigate losses (reasonably minimise effects of breach).

  • Case: British Westinghouse Electric v Underground Electric Railways - benefits from replacement devices factored into damages.

Liquidated Damages

• Pre-determined damages for breach specified in a contract.

• Must represent a legitimate estimate of loss or risk being viewed as a penalty.

  • Case: ParkingEye v Beavis - assessed for validity against penalty test.

Quantum Meruit

• Payment based on what a contract is worth, typically when no payment has been received.

• Courts aim to provide market value rather than compensatory damages.

Equitable Remedies Limitation

• Specific performance and recission are not available as of right in many situations, including:

  1. Adequate remedies exist.

  2. Contracts of personal service.

  3. Impossibility or illegality.

  4. Claimant's conduct (must act equitably).

Case Example: Page One Records v Britton

• Injunction refused to compel The Troggs to continue with Page One Records, equating to specific performance of personal services.

Termination for Breach

• Breach can lead to contract termination if serious:

  1. Breach of condition or innominate term.

  2. Refusal to perform obligations.

  3. Making performance impossible.

Rights Against Goods under CRA 2015

• Rights include:

  • Short term right to reject (s.20)

  • Right to repair/replacement (s.23)

  • Price reduction or final right to reject (s.24)